"DeepSeek's AI Revolution: Open-Source, Cost-Effective, and Censored"

DeepSeek: The New AI Powerhouse - What is it?

DeepSeek, a Chinese AI startup founded in 2023, has gained significant attention for its innovative approach to developing large open-source language models. The company, led by Liang Wenfeng, a former head of the High-Flyer quantitative hedge fund, has quickly risen to the top of the AI market with its focus on open-source innovation, longer context windows, and dramatically lower usage costs compared to proprietary platforms.

In November 2023, DeepSeek introduced the "thinking" super powerful AI model, DeepSeek-R1-Lite-Preview, which performed on par with OpenAI's o1-preview in published tests. The company's latest model, DeepSeek-R1, released in January 2024, has surpassed competitors from Meta and OpenAI in tests, demonstrating advanced reasoning and performance benchmarks.

DeepSeek's open-source model, DeepSeek-R1, has 671 billion parameters, significantly more than Llama 3.1's 405 billion parameters. This metric reflects the AI's ability to adapt to more complex applications and provide more accurate responses. The development of the neural network took two months, costing $5.58 million and requiring significantly fewer computational resources compared to larger tech companies. Nvidia H800 chips were used, optimizing the use of computing power in the model training process.

Thanks to the new AI model DeepSeek-R1, the company's chatbot skyrocketed in the rankings of free apps on the App Store in the USA, surpassing even ChatGPT. DeepSeek's approach to AI development has raised concerns about censorship, as the model is subject to government control and will not touch on politically sensitive topics such as Tiananmen Square or Taiwan's autonomy.

DeepSeek's innovative AI models have sparked a sell-off in the AI market, with investors concerned about a bubble in the sector. American AI startups are spending billions on training neural networks while their valuations reach hundreds of billions of dollars. DeepSeek's emergence has demonstrated that this isn't necessary, leading to a sharp decline in shares of Japanese companies involved in chip production and a significant drop in the American stock market, particularly affecting shares of Nvidia, the main beneficiary of the AI boom.

DeepSeek's open-source coding model, exemplified by DeepSeek Coder